• 03.20.09

Even Madoff Had Great References

With the daily revelations about executives acting in their own self-interests while their companies, shareholders and the marketplace suffers, you have to wonder who hired all these Nero-clones while Rome burns to the ground? The irony is that they all had stellar references. This article identifies how even great references can lead to hiring mistakes.

Recently, a high level executive candidate of mine was interviewing for a pivotal role that reported directly to my client, a CEO. The candidate was a “game changer”, with a history of pointing out how the “status quo” wasn’t cutting it, and implementing improvements. As we moved into checking his references, it was no surprise that I heard about some past difficulties the candidate had with certain individuals. It was clear that over the course of his career he had to take some unpopular stances in order to drive change. 


After 20 years in the executive search industry, it never ceases to amaze me how one bad reference can bring a candidate’s viability to a screeching halt. Now look, I understand there are issues that surface in the reference checking process like financial impropriety, integrity, and other potentially sordid details. These should, and will justifiably stop someone’s candidacy cold. However, even this type of information must be vetted through a number of sources in order to conclude that there truly is an issue, and get to a satisfactory level of understanding of the “truth”.

But when information surfaces that is not so clear cut, what do you do? Certainly, it is essential to know if there is a behavioral thread that points to long-standing weaknesses with a candidate. However, it is often the case that negative feedback points to something else entirely.

Betty Davis famously said, “If everyone likes you, you’re pretty dull.” I take a different perspective and say, “if everybody likes you, you are probably mediocre.” Just ask Michael Dell, John Chambers or Jack Welch if over the course of their careers they always won the popular vote. Bottom line, if you’re committed to delivering the extraordinary, you are not going to be everybody’s best friend, especially in this trying economy. 

This doesn’t mean that references aren’t important; in fact, quite the contrary. It means you need to look at the reference checking process as your opportunity to create a very complete and holistic picture of a candidate over the course of his or her career.

To this end, I’ve developed Three Cardinal Rules of Reference Checking that have always served me well.

1. If you dig long and deep enough, you can find dirt on God (also the Pope, Mother Teresa, and even Oprah!)

No one is infallible. If someone has a long career, the chances are they’ve stepped on some toes and made mistakes along the way. Look at your own life and career. If you’re like most people, you’ve learned from your mistakes. While you want to understand the mistakes candidates have made, what’s really important is to determine if and what they learned from them. And remember, you can even find dirt on God, so if the candidate appears to be spotless, that fact alone is a red flag!


2. Understand the context in which the information is given.

In order to get to a complete picture about a person, you have to understand the following relationships:

Candidate – reference
Candidate – company
Reference – company


What was going in the company at that particular time

The lesson here is that oftentimes a successful reference check tells you as much or more about the reference and the company than the candidate.

Several years back I had a finalist candidate for a senior position. We were in the middle of the reference checks, and the candidate was ready to sign on the dotted line as a direct report to the CEO. We typically identify and speak for 45-60 minutes with 12 people in our standard reference checking process. We had received consistently balanced feedback, and as we were winding the process down, the CEO talked briefly with a non-supplied reference that had searing things to say about our candidate. Based on this one reference, the CEO withdrew the offer.


However, we had discovered through our process that this non-supplied reference, a career employee at his company, had a history of accusing any of his direct reports who left for employment elsewhere, as being personally disloyal to him, and also to their company. We discovered ample corroborating evidence from multiple sources that this individual would go out of his way to say disparaging remarks about a departing employee, continuing this pattern of spreading malicious gossip long after the employee had left.

Unfortunately, my CEO client didn’t pay attention to understanding the context of the reference!

3. The relevance of the reference is in direct proportion to its age.

The older the information, the less relevance it has. In other words, give more credence to newer information.

A few years ago, I was checking references on a candidate for a senior sales position, and ended up being routed to an unsupplied reference that worked with the candidate early in his career. Typical to a reference with older information, he couldn’t really comment on the important elements in the role for which the candidate was being considered. I then asked if there was anything else he wanted to comment on that he thought was relevant, and much to my shock and surprise he stated that the candidate had exhibited “racist” tendencies and had discriminated against African-American employees! What?!

When someone delivers a bombshell like that, you have to find out more information, so I pressed the individual to explain the specifics of what happened, and also tracked down several other people who were at the company at the time, keeping in mind that the alleged incident occurred 20 years ago.

I discovered that the candidate had indeed not promoted an African American employee. This individual was subsequently dismissed due to poor performance, filed a discrimination lawsuit against my candidate and his company, which ended up being thrown out of court. End of story, a disgruntled employee without a cause. I ended up telling my candidate that something had surfaced around a discrimination lawsuit from his past, but that I had gotten to the bottom of it and determined it was meaningless.


He laughed about it and told me, “You know what’s crazy? When that incident happened I was newly married. You haven’t known this ‘til now, but my wife is African American and as you do know, we’ve had and raised three wonderful children. I never understood this incident when it happened. Thanks for finding out the truth on your own.”

Racist tendencies indeed!

With more people than ever out of work and the candidate pool becoming so deep and wide, it is easy for employers to fall into a false sense of security and just hire people based on their resumes or a recommendation from a good friend. Conducting thorough reference checks has never been more important. However, keep the Three Cardinal Rules of Reference Checking in mind and use them to guide your process. Reference checks should not make or break the hire BUT inform it. Remember, even Bernie Madoff had great references.